Utah’s economy is booming, and we can see growth all around us. This means more and better paying jobs, but has also resulted in a housing shortage, especially for those who have lower incomes. The number of available and affordable units for low-income families is decreasing, which puts these families at a greater risk of being homeless. The State Legislature is looking to push through legislation this year that will financially penalize cities that do not have adequate affordable housing.
According to a report published by The Department of Workforce Services, Housing and Community Development Division, the median family income (MFI) for a Utah household is $5634/month or $67,608/year. The report states that to be considered affordable housing, a family/individual should not be paying more than 30% of their income for housing. Based on that info, a family at the median income level should not be paying more than $1690 for rent.
The report goes on to look at data for those making 80%, 50%, and 30% of the MFI and the availability of housing units for those families and individuals. What they have found is the closer a family/individual gets to low-income or extremely low-income, the fewer units that are are available.
Housing developers claim that the lack of affordable housing units is primarily based on city zoning ordinances that limit or prohibit high-density and low-income housing units and high impact fees assessed by cities. Cities have pushed back stating that market conditions and other conditions outside of local government land use authority are contributing to the increase in housing prices. These include items such as increased costs for building materials, labor, and land; market demand (developers are looking to build “luxury apartments”), and realtor fees (real estate commissions = $325 million in Salt Lake County in 2016).
While a bill hasn’t yet been introduced, legislators have stated they will be introducing one that assesses a fee to cities that lack adequate low-income housing units in their city. A preliminary concept is to base the fee on a formula that considers the amount of affordable housing in the city and exempts cities that house a homeless resource center. Speaker Hughes has referred to this as “must pass” legislation.
The Impact on Cedar Hills
As the bill has not yet been introduced, we do not yet know what this means for Cedar Hills. Based on housing data available to us, it is clear we do not have any housing units in the city that qualify as low-income housing. One concern that we’ve raised is that for small cities such as ours that are close to being built-out residentially, there simply isn’t room to expand to zone for high-density low-income housing units. We have been following zoning ordinances that have been legal and in place for decades, but now will be penalized for not having room for this type of growth. Additionally, based on land prices in our area and lack of public transportation, it is unlikely that developers would be interested in building low-income housing in our area. And as we’ve seen from the high-density proposals that have been presented to us, high-density does not necessarily mean it qualifies as affordable housing. In fact, an argument made by representatives of a nearby Utah County city is that they have zoned portions of their city for high-density housing but developers are building luxury apartments in those areas. They do not have developers interested in building low-income housing in their city.
Questions that we are waiting to receive answers to include:
- What criteria will be looked at when assessing a fine? Population? Land availability?
- Who will collect, manage, and expend the revenue generated by the fee?
- What homeless resources will qualify for funding generated by the fee? Will entities such as Lantern House in Ogden, a non-profit organization started by local religious organizations, be eligible to receive funds generated from this fee?
Once we have more information we will assess how this will impact our budget. It appears it may have a significant impact on city budgets, especially for cities such as ours that do not have any low-income housing. While there is clearly a need to address the housing issues that exist in Utah, and while I applaud the State Legislature for wanting to address housing shortages for low-income housing families, it is important for legislators to understand the impact these decisions have on municipalities. A better option may be to seek solutions at the county level instead of pitting cities against each other.
There are a few other bills that we are watching including small cell legislation (cell towers) and extraterritorial jurisdiction amendments (watershed protection programs). I will post more next week about the impact of bills such as these and how we are advocating for our city.